Thursday, December 31, 2009

Are the new social networking applications creating an economy short-term bubble?

What is currently happening resembles what we saw nn the first internet bubble, in 1999-2001: a sudden peak of interests about new tools and technologies.

Are we to expect a dark-age after the initial enthusiasm?
I think that this will not be the case, for the following reasons:

1) We are emerging from a deep economic crisis. The first internet bubble is still fresh in our memories. Investors are now extremely cautious. For this reasons they are not going to embark in the "fund everybody" craziness that characterized the first internet bubble.

2) Social use of the internet was gradually taking off in the last two years, as people massively signed in to Facebook, Myspace and the like. Definitely this is not a bottom up process, like the one happening in 2000. Big social network companies are profitable.

3) Business models of current social companies is more clear. Extracting social data from the masses. Drive their expenses. Map their relations. Influence. Build for future power moves.

4) Internet presence is built using names. Anonymity is not cool anymore. People blog and partecipate using their own names. Avatar identity merges with personal identity. Aliasing and nicknaming is out of trend. Digital reputation is converging and merging with true personal reputation.